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EOTS Manager

1. Overview

The EOTS daemon is responsible for managing EOTS keys, producing EOTS randomness, and using them to produce EOTS signatures.

Note: EOTS stands for Extractable One Time Signature. You can read more about it in the Babylon BTC Staking Litepaper. In short, the EOTS manager produces EOTS public/private randomness pairs. The finality provider commits the public part of this pairs to Babylon for every future block height that they intend to provide a finality signature for. If the finality provider votes for two different blocks on the same height, they will have to reuse the same private randomness which will lead to their underlying private key being exposed, leading to the slashing of them and all their delegators.

The EOTS manager is responsible for the following operations:

  1. EOTS Key Management:
    • Generates Schnorr key pairs for a given finality provider using the BIP-340 standard.
    • Persists generated key pairs in the internal Cosmos keyring.
  2. Randomness Generation:
    • Generates lists of EOTS randomness pairs based on the EOTS key, chainID, and block height.
    • The randomness is deterministically generated and tied to specific parameters.
  3. Signature Generation:
    • Signs EOTS using the private key of the finality provider and the corresponding secret randomness for a given chain at a specified height.
    • Signs Schnorr signatures using the private key of the finality provider.

The EOTS manager functions as a daemon controlled by the eotsd tool.

2. Configuration

The eotsd init command initializes a home directory for the EOTS manager. This directory is created in the default home location or in a location specified by the --home flag.

eotsd init --home /path/to/eotsd/home/

After initialization, the home directory will have the following structure

ls /path/to/eotsd/home/
  ├── eotsd.conf # Eotsd-specific configuration file.
  ├── logs       # Eotsd logs

If the --home flag is not specified, then the default home location will be used. For different operating systems, those are:

  • MacOS ~/Users/<username>/Library/Application Support/Eotsd
  • Linux ~/.Eotsd
  • Windows C:\Users\<username>\AppData\Local\Eotsd

3. Keys Management

Handles the keys for EOTS.

3.1. Create EOTS Keys

The binary eotsd has the option to add a new key to the keyring for later usage with signing EOTS and Schnorr signatures. Keep in mind that new keys can be created on demand by the GRPC call from fpd. But, if you would like to add a new EOTS keys manually, run eotsd keys add.

This command has several flag options:

  • --home specifies the home directory of the eotsd in which the new key will be stored.
  • --key-name mandatory flag and identifies the name of the key to be generated.
  • --passphrase specifies the password used to encrypt the key, if such a passphrase is required.
  • --hd-path the hd derivation path of the private key.
  • --keyring-backend specifies the keyring backend, any of [file, os, kwallet, test, pass, memory] are available, by default test is used.
  • --recover indicates whether the user wants to provide a seed phrase to recover the existing key instead of randomly creating.
eotsd keys add --home /path/to/eotsd/home/ --key-name my-key-name --keyring-backend file

Enter keyring passphrase (attempt 1/3):
...

2024-04-25T17:11:09.369163Z     info    successfully created an EOTS key        {"key name": "my-key-name", "pk": "50b106208c921b5e8a1c45494306fe1fc2cf68f33b8996420867dc7667fde383"}
New key for the BTC chain is created (mnemonic should be kept in a safe place for recovery):
{
  "name": "my-key-name",
  "pub_key_hex": "50b106208c921b5e8a1c45494306fe1fc2cf68f33b8996420867dc7667fde383",
  "mnemonic": "bad mnemonic private tilt wish bulb miss plate achieve manage feel word safe dash vanish little miss hockey connect tail certain spread urban series"
}

Store the mnemonic in a safe place. With the mnemonic only it is possible to recover the generated keys by using the --recover flag.

3.2. Recover Keys

To recover the keys from a mnemonic, run:

eotsd keys add --home /path/to/eotsd/home/ --key-name my-key-name --keyring-backend file --recover

> Enter your mnemonic
bad mnemonic private tilt wish bulb miss plate achieve manage feel word safe dash vanish little miss hockey connect tail certain spread urban series
2024-04-25T17:13:29.681324Z     info    successfully created an EOTS key        {"key name": "my-key-name", "pk": "50b106208c921b5e8a1c45494306fe1fc2cf68f33b8996420867dc7667fde383"}
New key for the BTC chain is created (mnemonic should be kept in a safe place for recovery):
{
  "name": "my-key-name",
  "pub_key_hex": "50b106208c921b5e8a1c45494306fe1fc2cf68f33b8996420867dc7667fde383",
  "mnemonic": "noise measure tuition inform battle swallow slender bundle horn pigeon wage mule average bicycle claim solve home swamp banner idle chapter surround edit gossip"
}

You will be prompted to provide the mnemonic on key creation.

3.3. Sign Schnorr Signatures

You can use your key to create a Schnorr signature over arbitrary data through the eotsd sign-schnorr command. The command takes as an argument the file path, hashes the file content using sha256, and signs the hash with the EOTS private key in Schnorr format by the given key-name or btc-pk. If both flags --key-name and --btc-pk are provided, btc-pk takes priority.

eotsd sign-schnorr /path/to/data/file --home /path/to/eotsd/home/ --key-name my-key-name
{
  "key_name": "my-key-name",
  "pub_key_hex": "50b106208c921b5e8a1c45494306fe1fc2cf68f33b8996420867dc7667fde383",
  "signed_data_hash_hex": "b123ef5f69545cd07ad505c6d3b4931aa87b6adb361fb492275bb81374d98953",
  "schnorr_signature_hex": "b91fc06b30b78c0ca66a7e033184d89b61cd6ab572329b20f6052411ab83502effb5c9a1173ed69f20f6502a741eeb5105519bb3f67d37612bc2bcce411f8d72"
}

3.4. Verify Schnorr Signatures

You can verify the Schnorr signature signed in the previous step through the eptsd veify-schnorr-sig command. The command takes as an argument the file path, hashes the file content using sha256 to generate the signed data, and verifies the signature from the --signature flag using the given public key from the --btc-pk flag. If the signature is valid, you will see Verification is successful! in the output. Otherwise, an error message will be printed out.

eotsd verify-schnorr-sig /path/to/data/file --btc-pk 50b106208c921b5e8a1c45494306fe1fc2cf68f33b8996420867dc7667fde383 \
--signature b91fc06b30b78c0ca66a7e033184d89b61cd6ab572329b20f6052411ab83502effb5c9a1173ed69f20f6502a741eeb5105519bb3f67d37612bc2bcce411f8d72

4. Starting the EOTS Daemon

You can start the EOTS daemon using the following command:

eotsd start --home /path/to/eotsd/home

If the --home flag is not specified, then the default home location will be used.

This will start the EOTS rpc server at the address specified in eotsd.conf under the RpcListener field, which is by default set to 127.0.0.1:12582. You can change this value in the configuration file or override this value and specify a custom address using the --rpc-listener flag.

eotsd start

2024-02-08T17:59:11.467212Z	info	RPC server listening	{"address": "127.0.0.1:12582"}
2024-02-08T17:59:11.467660Z	info	EOTS Manager Daemon is fully active!

All the available cli options can be viewed using the --help flag. These options can also be set in the configuration file.

Note: It is recommended to run the eotsd daemon on a separate machine or network segment to enhance security. This helps isolate the key management functionality and reduces the potential attack surface. You can edit the EOTSManagerAddress in the configuration file of the finality provider to reference the address of the machine where eotsd is running.